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IRS Employee Stole Data To Forge $8M In Fraudulent Returns 151

Posted by timothy
from the but-they-love-you-at-heart dept.
coondoggie writes "A former Internal Revenue Service employee this week got 105 months in prison for pleading guilty to theft of government property and aggravated identity theft in a case where the guy tried to get away with nearly $8 million in fraudulent tax returns. The U.S. Department of Justice said Thomas Richardson used his inside knowledge of IRS operations to commit his crime, which was pretty audacious. According to the DOJ, Richardson admitted that within a two-day period, April 15 to April 17, 2006, he filed or caused to be filed 29 fraudulent 2005 individual income tax returns totaling $7,922,657."
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IRS Employee Stole Data To Forge $8M In Fraudulent Returns

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  • by v1 (525388) on Friday February 10, 2012 @08:53PM (#39002055) Homepage Journal

    Richardson used his inside knowledge of IRS operations to commit his crime,

    So I wonder what aspect of "insider knowledge" he used? Logins and passwords? back doors? social engineering? test accounts? phone numbers to helpful clerks that don't think about what they're being asked to do? secret URLs?

    Is there a back door that anyone with similar "insider knowledge" can use, that's not a hole that's closable with say a simple password change? (has the hole been closed?)

  • by izomiac (815208) on Friday February 10, 2012 @10:06PM (#39002447) Homepage
    The best criminals are smart enough to make it look like a crime never occurred, and there are probably a fair number of these (not an extraordinary number, there are lucrative "honest" lines of work for smart people). This guy probably though he could pull that off.

    The article isn't too explicit on the details, but it sounds like he used his position and expertise to identify 29 people who were [dumber: weren't] eligible but didn't file [dumber: yet] for substantial tax returns. Then, he used the data he had (e.g. name, social security number, finances, etc.) to file those returns, with the refunds going to accounts under his control. (Smart: setup accounts in the proper recipient's name and state, Dumb: setup the accounts in his own state/name.)

    This was an all-or-nothing crime. Either it's never discovered or he's caught. Who knows if he's the first to have tried? And, for those wanting his head, it wasn't a horrible crime. It's stealing, since it's not his money, but the victim is hard to identify (the people not claiming refunds? the government for relying on ignorance/apathy to not refund extra taxes inadvertently paid?). The stiff punishment is likely related to how close he was to getting away with it and how much he almost got (i.e. to make the risk greater than the reward).
  • by Anonymous Coward on Friday February 10, 2012 @11:13PM (#39002695)

    After watching Top Gear I'd settle on Vietnam. Looks beautiful and friendly and has no diplomatic or extradition treaties.

    Everywhere looks "beautiful and friendly" when you've got a massive production team running around making sure everything goes smoothly (and an editing team for when things don't).

  • by rachit (163465) on Friday February 10, 2012 @11:15PM (#39002701)

    You know, there is never just one cockroach...

  • Re:Cheaters (Score:2, Insightful)

    by cforciea (1926392) on Friday February 10, 2012 @11:20PM (#39002717)
    Consumption taxes are not inherently simpler than income taxes. The core reason behind conservatives arguing constantly for a flat consumption tax is that they are tired of progressive taxes and really would prefer taxes to be regressive. It has very little to do with the IRS or your plight.
  • Re:Cheaters (Score:5, Insightful)

    by ScentCone (795499) on Saturday February 11, 2012 @12:33AM (#39002931)

    tired of progressive taxes and really would prefer taxes to be regressive

    Nice straw man there. No, not regressive. Flat. Telling half the people in the country that they don't need to pay income taxes is no way run a civil society. Not if they still get to vote, anyway.

  • by El Torico (732160) on Saturday February 11, 2012 @04:23AM (#39003539)
    Everywhere is beautiful and friendly when you're very rich.
  • by Anonymous Coward on Saturday February 11, 2012 @06:10AM (#39003779)

    FWIW, being a lowly anonymous coward: I worked for large multinational bank, and low-level petty thieves in the system (trying to cash checks under stolen identities, steal money orders, etc.) are *always* dismissed without police prosecution. Furthermore, this is widely known amongst employees, some of whom attempt to take advantage of the PR-shy policy. But there are massive amounts of checks and balances between multiple departments and heavy security to try to guard against loss as much as possible, making it very difficult for a lone perpetrator to get away with pocketing much. On the other hand, nepotism and cronyism run rampant in the banking industry, so if you have three or four collaborators covering up each other's thefts working from different departments and floors, that's when the take gets juicy.

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